Why BofA Is Turning Bullish On Retailer At Home

BofA Securities upgraded At Home Group Inc (NYSE: HOME) from Underperform to Buy and raised price target from $5 to $16.

Analyst Curtis Nagle said there is sustainability in home-related trends and listed the following as reasons for the upgrade:

• At Home is going beyond industry sales expectations
• Leverage will be lower after the second quarter
• At Home’s valuation is more attractive with the new estimates in store
• At Home reported Q2 results with an EBITDA that slightly topped the earnings from FY19

“We believe a higher multiple is warranted on higher confidence on sales/ EPS growth through the next 2-3yrs,” the analyst said. 

Nagle named the following investment takeaways on the stock:

• People are spending more towards their homes and away from travel and entertainment.
• At Home stores are staying stable, even in states with high virus counts.
• Lastly, At Home is using cash made in the second quarter to pay off $228 million in short-term debt.

BofA raised its 2021 EPS estimate from 8 cents to $1.43.

HOME Price Action: The stock was down 2.78% at $12.25 at last check Friday. 

Public domain photo via Wikimedia.